IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/1036.html
   My bibliography  Save this paper

Output decline in Hungary and Poland in 1990-91 : structural change and aggregate shocks

Author

Listed:
  • Commander, Simon
  • Coricelli, Fabrizio

Abstract

The authors try to distinguish between general and national features in explaining the impulse, transmission channels, and path of output decline in Hungary and Poland. It is clear that output losses are massively concentrated in the socialized industrial sectors, but they identify significant differences in the distribution of those losses and their associated employment outcomes; in the timing and degree of synchronization of those losses; and in the two countries'different policy responses to these powerful recessionary pressures. In particular, they try to separate shocks particular to a sudden (Polish) big bang and those attributable to a more gradual path of reform (Hungary). The contrast between Hungary and Poland is less robust than initial impressions led one to expect. By 1991, both economies have open trade regimes, and a practically fully liberalized price system. The magnitude of shocks to both economies and the accompanying macroeconomic policies clearly diverged. The role of macroeconomic policies was easier to isolate in 1990, before the full effects of the CMEA shock could be felt. Interestingly, in 1990, the decline in output was far smaller in Hungary than in Poland, and was of rather a different nature. In 1990, employment declined more rapidly than output in Hungary, but lagged sharply behind output in Poland. So productivity increased, albeit marginally, in Hungary, while declining sharply in Poland. Contrary to expectations, the Polish big bang approach has produced less adjustment than the more gradual approach followed by Hungary. One reason for this could be the lack of progress on microeconomic reforms that have accompanied the drastic shift in macroeconomic policies. But the authors suggest that this result could also be associated with the two different paths to reform, the big bang and gradualism.

Suggested Citation

  • Commander, Simon & Coricelli, Fabrizio, 1992. "Output decline in Hungary and Poland in 1990-91 : structural change and aggregate shocks," Policy Research Working Paper Series 1036, The World Bank.
  • Handle: RePEc:wbk:wbrwps:1036
    as

    Download full text from publisher

    File URL: http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/1992/11/01/000009265_3961004000448/Rendered/PDF/multi0page.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Commander, Simon*Coricelli, Fabrizio*Staehr, Kar, 1991. "Wages and employment in the transition to a market economy," Policy Research Working Paper Series 736, The World Bank.
    2. Bijan B. Aghevli & Eduardo Borensztein & Tessa Van der Willigen, 1992. "Stabilization and Structural Reform in the Czech and Slovak Federal Republic; First Stage," IMF Occasional Papers 92, International Monetary Fund.
    3. Michael Bruno, 1992. "Stabilization and Reform in Eastern Europe: A Preliminary Evaluation," IMF Staff Papers, Palgrave Macmillan, vol. 39(4), pages 741-777, December.
    4. David Lipton & Jeffrey D. Sachs, 1990. "Creating a Market Economy in Eastern Europe: The Case of Poland," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 21(1), pages 75-148.
    5. Frydman, R. & Wellisz, S. & Kolodko, G.W., 1991. "Stabilization in Poland: A Progress Report," Papers 4, United Nations World Employment Programme-.
    6. Dani Rodrik, 1992. "Making Sense of the Soviet Trade Shock in Eastern Europe: A Framework and Some Estimates," NBER Working Papers 4112, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Recanatini, Francesca & Ryterman, Randi, 2001. "Disorganization or self-organization : the emergence of business associations in a transition economy," Policy Research Working Paper Series 2539, The World Bank.
    2. Milan Nikolic & Jacek Rostowski, 1995. "Exit in the Framework of Macro-economic Shocks and Policy Responses during Transition: a Cross-country Comparison," CASE Network Studies and Analyses 0056, CASE-Center for Social and Economic Research.
    3. Stanislaw Gomulka, 1994. "Economic and political constraints during transition," Europe-Asia Studies, Taylor & Francis Journals, vol. 46(1), pages 89-106.
    4. Slavo Radosevic, 1995. "Science and technology capabilities in economies in transition: effects and prospects1," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 3(4), pages 459-478, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Alain de Crombrugghe & David Lipton, 1993. "The Government Budget and the Economic Transformation of Poland," WIDER Working Paper Series wp-1993-111, World Institute for Development Economic Research (UNU-WIDER).
    2. Michael Bruno, 1993. "Stabilization and the macroeconomics of transition ‐ How different is Eastern Europe?," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 1(1), pages 5-19, January.
    3. Michael Bruno, 1994. "Stabilization and Reform in Eastern Europe: A Preliminary Evaluation," NBER Chapters, in: The Transition in Eastern Europe, Volume 1, Country Studies, pages 19-50, National Bureau of Economic Research, Inc.
    4. Perotti, E. C., 1998. "Inertial credit and opportunistic arrears in transition," European Economic Review, Elsevier, vol. 42(9), pages 1703-1725, November.
    5. Walsh, Patrick Paul & Whelan, Ciara, 2001. "Firm performance and the political economy of corporate governance: survey evidence for Bulgaria, Hungary, Slovakia and Slovenia," Economic Systems, Elsevier, vol. 25(2), pages 85-112, June.
    6. Coricelli, Fabrizio & Revenga, Ana, 1992. "Wages and unemployment in Poland : recent developments and policy issues," Policy Research Working Paper Series 821, The World Bank.
    7. Kazimierz Stanczak, 1994. "Endogenous Market Power and Adjustment under Fixed Exchange Rates: Interpreting the Polish Experience 1990-1991," UCLA Economics Working Papers 714, UCLA Department of Economics.
    8. Raúl de Arriba Bueno, 2006. "Private or Market Economy in Bulgaria? An Institutional Approach to the Bulgarian Transition," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 2, pages 71-89.
    9. Blangiewicz, Maria & Charemza, Wojciech W., 1999. "East European Economic Reform: Some Simulations on a Structural Vector Autoregressive Model," Journal of Policy Modeling, Elsevier, vol. 21(5), pages 535-557, September.
    10. Bennett, John & Dixon, Huw David, 1995. "Macroeconomic equilibrium and reform in a transitional economy," European Economic Review, Elsevier, vol. 39(8), pages 1465-1485, October.
    11. Blangiewicz, Maria & Charemza, Wojciech W., 2001. "East European economic reform: Some simulations on a structural VAR model," Journal of Policy Modeling, Elsevier, vol. 23(2), pages 147-160, February.
    12. Bennett, John & Estrin, Saul & Hare, Paul, 1999. "Output and Exports in Transition Economies: A Labor Management Model," Journal of Comparative Economics, Elsevier, vol. 27(2), pages 295-317, June.
    13. Jane Hardy, 1998. "Cathedrals in the Desert? Transnationals, Corporate Strategy and Locality in Wroc ^ aw," Regional Studies, Taylor & Francis Journals, vol. 32(7), pages 639-652.
    14. Velasco, Andres, 2000. "Debts and deficits with fragmented fiscal policymaking," Journal of Public Economics, Elsevier, vol. 76(1), pages 105-125, April.
    15. Bertocchi, Graziella & Spagat, Michael, 1997. "Structural uncertainty and subsidy removal for economies in transition," European Economic Review, Elsevier, vol. 41(9), pages 1709-1733, December.
    16. Ichiro Iwasaki & Taku Suzuki, 2016. "Radicalism Versus Gradualism: An Analytical Survey Of The Transition Strategy Debate," Journal of Economic Surveys, Wiley Blackwell, vol. 30(4), pages 807-834, September.
    17. Malcom Dowling & Ganeshan Wignaraja, 2006. "Central Asia after fifteen years of transition: growth, regional cooperation, and policy choices," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 13(2), pages 113-144, December.
    18. van Aarle, B. & Budina, N., 1995. "Currency substitution in Eastern Europe," Other publications TiSEM ae2e408f-a310-4eb3-9d89-5, Tilburg University, School of Economics and Management.
    19. Robert S. Chase, 1997. "Markets for Communist Human Capital: Returns to Education and Experience in the Czech Republic and Slovakia," Working Papers 770, Economic Growth Center, Yale University.
    20. Avanesyan, Vahram & Freinkman, Lev, 2002. "Costing-out the Big Bang: Impact of external shocks on the Armenian economy at the outset of transition," MPRA Paper 10012, University Library of Munich, Germany.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:1036. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi). General contact details of provider: http://edirc.repec.org/data/dvewbus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.